The energy price cap (EPC), initially introduced to protect consumers, might be having unintended effects, says a recent study by the Centre for Policy Studies.

According to the report, the EPC, designed to prevent unfair pricing, could actually be limiting competition.

This might result in fewer choices for consumers and possibly higher costs than expected.

The study suggests that the EPC’s role as a benchmark for prices might be causing a lack of innovation in the market.

Instead of encouraging different pricing options, it might unintentionally be keeping prices stagnant, the think tank has said.

Moreover, the report points out that the EPC could be influencing higher costs for consumers, which could even contribute to overall inflation.

By trying to ensure fair pricing, the EPC might inadvertently be pushing prices up. The Centre for Policy Studies report emphasises the importance of rethinking the EPC’s role.

While it’s crucial to protect consumers, the study suggests that some adjustments might be needed to make sure competition stays healthy, encouraging innovation and giving consumers more choices.

Article source: https://www.energylivenews.com/2023/08/11/uk-energy-price-cap-consumers-hit-hard-as-competition-wanes/